Airbus chief defiant despite strike against cuts

7th March 2007, Comments 0 comments

PARIS, March 7, 2007 (AFP) - Airbus chief Louis Gallois came out fighting in defence of deep cutbacks at the aircraft manufacturer on Wednesday despite mass protest strikes and a union warning of a long fight ahead.

PARIS, March 7, 2007 (AFP) - Airbus chief Louis Gallois came out fighting in defence of deep cutbacks at the aircraft manufacturer on Wednesday despite mass protest strikes and a union warning of a long fight ahead.

Gallois stressed that the situation at the aircraft maker was "extremely serious" and that the plan to cut 10,000 jobs and streamline production was "unavoidable."

But he also signalled that the details "can shift." Management and unions are to meet next Wednesday.

Delays and uncertainty have cost Airbus some orders recently, analysts doubt that the rescue cuts can be carried through and the price of shares in the parent group EADS has slumped by about 10.0 percent since the details were announced a week ago.

Gallois reassured that Airbus parent group EADS had adequate cash for now although it would eventually need new funds, but told leading French politicians campaigning for a presidential election not to interfere in management.

"I would not want Airbus to become a hostage of the presidential campaign," he said on French RTL radio, referring to France's presidential elections in April and May.

While it was understandable that politicians should be interested in Airbus, "I don't want them to interfere in management," he said.

Gallois stood by the measures to slash jobs and save 5.0 billion euros (6.6 billion dollars) by 2010 a day after workers at the four main Airbus sites in France had gone on strike and mounted mass protest marches on Tuesday.

Trade unions have also warned of a Europe-wide strike within the group on March 16, despite tension between labour groups in Germany and France about how cuts and new work is to be distributed between the countries.

In France on Tuesday, a leader of the main Force Ouvriere (Worker Strength) union at Airbus, Jean-Francois Knepper had warned: "If we aren't heard today, we'll have to strike harder, the fight is just beginning."

An estimated 12,000-15,000 workers marched through Toulouse, where Airbus is based, to protest the cutbacks on Tuesday.

Gallois did not comment on any increase of the French state's holding of 15.0 percent in EADS, nor on a suggestion by the opposition Socialist candidate in the presiential election, Segolene Royal, for regional authorities to take a "symbolic" shareholding.

But, in a reference to rival manufacturer Boeing, he said another way of providing help would be to support research and technology "because one of our weaknesses is that the effort on research and technology is perhaps insufficiently supported in Europe compared with what happens in the United States."

The restructuring programme called "Power8" was "unavoidable", he insisted, stressing that job cuts would involve early retirement paid for by the company or by voluntary departures

Asked how much room there was for changes to the measures, Gallois said "It can shift. We will have to talk particularly about the future of the sites, about how to invest in these sites."

He added: "The situation is extremely serious. We have to make changes in the business. The administrative costs are far too high."

Asked about pressure from centre-right Prime Minister Dominique de Villepin for EADS to waive its dividend this year, Gallois said that this was a decision for shareholders.

The main shareholders in EADS are the French state and the French Lagardere group, each with 15 percent, although Lagardere holds all of these voting rights, and the German group DaimlerChrysler, also with 15.0 percent. A consortium of German interests also has 7.5 percent.

Lagardere's holding is to fall to 7.5 percent in July.

Gallois, who represented the French state on the board of EADS until being appointed joint head of EADS in July 2006, is to be replaced in that function by the former head of BNP Paribas bank Michel Pebereau, Finance Minister Thierry Breton said on Wednesday.

Copyright AFP

Subject: French news

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